Evaluating the Viability of Small Businesses

Small businesses are privately held corporations, partnerships, or singular proprietorships that have fewer employees than a normal-sized company or business and/or lesser annual income than a large business or corporation. A business can be any type of business: manufacturing, retailing, warehousing, selling, leasing, Franchising, or Professional Services. Companies are normally defined in business dictionaries as small enterprises having a definite place of business, owned by and operated for profit. “Business enterprises” also may be used as a description of types of corporations with a similar list of characteristics. The dictionary definition of a “Corporation” is an association of people or companies having certain formal associations, such as shareholders, owners, operators, or employees. Other types of corporations are publicly-held cooperatives, mutual aid associations, government-supported enterprises, non-profit corporations, privately owned resources, land trusts, and cooperative communities.

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Evaluating the Viability of Small Businesses

Small businesses are privately held corporations, partnerships, or singular proprietorships that have fewer employees than a normal-sized company or business and/or lesser annual income than a large business or corporation. A business can be any type of business: manufacturing, retailing, warehousing, selling, leasing, Franchising, or Professional Services. Companies are normally defined in business dictionaries as small enterprises having a definite place of business, owned by and operated for profit. “Business enterprises” also may be used as a description of types of corporations with a similar list of characteristics. The dictionary definition of a “Corporation” is an association of people or companies having certain formal associations, such as shareholders, owners, operators, or employees. Other types of corporations are publicly-held cooperatives, mutual aid associations, government-supported enterprises, non-profit corporations, privately owned resources, land trusts, and cooperative communities.

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In a “Corporation,” the business and ownership are separated from the shareholders, who own and operate the business. Instead of one or more shareholders for each partner, there is just one shareholder with overall control. Thus, a corporation provides greater protection from unexpected losses due to corporate mishaps or disagreements among partners. The use of a corporation also makes it simpler to organize and manage small businesses and their employees. Also, because of the separate ownership, management, and profit sharing structure, it is easier for the entrepreneur to determine how to spend the company’s funds and run it in the most efficient manner possible.

There are several advantages to operating and owning small businesses that benefit all owners equally. First, small businesses allow entrepreneurs the freedom to establish a personal and professional business apart from their employment. Second, small businesses provide small business owners the ability to work on their own, when it is convenient for them. And third, owning a small business entitles the owner to extensive employee benefits. These benefits include paid time off, paid holidays, sick leave, health insurance, dental care, life insurance, disability income, and many other benefits.

The small business owner must carefully consider the kind of financing they will need to keep their small businesses profitable and expand their scope of business. For this reason, they should not overlook the importance of marketing mix. A marketing mix refers to the mix of tactics and strategies used to promote the products and services offered by the small businesses. Usually, the smaller organizations have limited budgets to spend on marketing and advertising. However, by carefully combining traditional advertising with Internet marketing and other forms of media promotion, small businesses can increase their market reach and develop loyal customers.

One example of a form of marketing mix for small businesses is called project management. The purpose of a project management approach is to allow business owners to manage their resources more effectively. Businesses that benefit from project management include those that have high levels of employee turnover and those that suffer from the lack of a consistent workforce. By carefully monitoring the flow of work, project managers are able to prevent or control cost overruns and to efficiently and effectively complete projects.

Another strategy to use when looking at the viability of a small business is to consider whether the business has the right employees to meet the needs of the business model. Typically, it is beneficial for small businesses to consider retaining existing employees to develop new skills and to maintain efficiency. However, some businesses have the right employees but do not have the training or other resources to support those employees. In this case, small businesses should consider outsourcing some or all of their employee needs to other locations where these resources may be easily obtained.

A final consideration to make when assessing the viability of a small business is the amount of space that is available. While space availability is always a concern in many business applications, particularly in metropolitan areas, it should not be the only factor considered when determining whether or not a business can become functional. While it may be difficult to obtain enough space for a business of twenty-five or thirty-five employees, it is far easier to find office space that meets the needs of a business of one hundred or two hundred employees. When evaluating office space requirements, small businesses should keep in mind that each additional employee is an expense that the company will ultimately have to bear.

There are many compelling reasons why small businesses should consider self-employment over employment. In order to grow a business beyond the twenty-five or thirty-five employee level, many small businesses must build their infrastructure on their own. When this occurs, self-employed individuals often have greater control over their resources. With the assistance of a business mentor and appropriate resources, small businesses can grow successfully and attract the types of clients and customers that will allow them to realize their full revenue potential.

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